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US aims to curb China’s hi-tech progress through trade war: expert

(People's Daily Online)    09:38, March 29, 2018

The United States has launched a trade war with China recently for the reason of having a large trade deficit and also over concerns regarding China’s good momentum in the aspect of hi-tech development.

Washington announced a higher tax levy on imported steel, aluminum products and even products in China’s national manufacturing plans, causing global trade tensions.

China is presenting a comprehensive challenge to the US core technologies, claimed a former politician in a recent speech, adding that the challenge mainly comes from the nation’s Made in China 2025 initiative and the fast development of 5G technology.

The US does feel “challenged” by the Made in China 2025 plan. A small number of Americans assume that China’s high-tech industry is not developed independently but rather by relying on technologies stolen from the US. Therefore, the US wants to put a brake on China’s core technology development by raising tariffs so as to keep the monopoly position.

The Chinese government has stressed many times that the Made in China 2025 is open to all and provides equal treatment for both domestic and overseas-funded enterprises. The US is also welcomed to participate in the plan, but the country pursues hegemony in the regard of technologies and rules, showing an unwillingness to accept the “challenges” from China.

The Section 301 investigation specifically targets the science and technology field, noted Robert Lighthizer, United States Trade Representative, before President Donald Trump signed the related presidential memorandum.

Competition between countries in the future falls on science and technology, for example competition in the regard of core technologies, industrial voices and even establishment of new international standards. Competition between China and the US in this field mainly focuses on three parts, namely the domestic market, core technologies and future international rules.

China has enhanced its overall capacity in chips and artificial intelligence in recent years, surpassing the US in the scale of digital economy and ranking only second to the US in the regard of AI technology. All of these facts make a context for the trade war targeting China.

For the aim of hindering the technological progress in China, the US decided to prohibit Chinese commodities from entering the US market under the excuse of intellectual property protection, and limits hi-tech product exports to China considering national security.

Taking the chips as an example, once China breaks the monopoly of chips, imports from the US and the original market share of the monopolist are both very likely to decrease.

President Donald Trump wishfully thought that a trade war may damage the good momentum of the Made in China 2025 initiative and curb China’s rapid technological development. However, the policy, which also serves for purposes related to the mid-term election this year, will not work for sure, and will even lead to a strong response from China.

On the other hand, the administration showed its selfishness again by curbing China at the cost of its own people’s interests. It has caused very negative impacts, disrupted the normal international trade order and added difficulties to backward countries.

Some countries usually attribute their own problems to the faults of other countries and make fundamental errors within strategic judgments. Any act that will be detrimental to both sides will never win people’s support around the world.

Note: The author is a senior fellow at Chongyang Institute for Financial Studies, Renmin University of China and member of the expert committee of China Council for the Promotion of International Trade (CCPIT).

(For the latest China news, Please follow People's Daily on Twitter and Facebook)(Web editor: Hongyu, Bianji)

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